Key Points

  • The Eleventh Circuit held that the Florida Board of Bar Examiners is an arm of the state entitled to Eleventh Amendment immunity, even though applicant fees fund its budget, because the Florida Supreme Court sets its fees, appoints its members and approves its budget.
  • The court held that Florida's experienced-applicant fee rule, which charges $1,600 to $3,000 to anyone admitted to another bar for more than 12 months, does not facially discriminate against out-of-state lawyers because it applies regardless of residency or where the license was issued.
  • The court held that out-of-state law licenses are not articles of commerce under the dormant Commerce Clause because each license authorizes practice only in its own state's legal market and cannot be traded or transferred.
  • Applying the three Locke v. Shore factors, the court found no discriminatory practical effect because about 55 percent of more than 7,600 experienced applicants since 2008 had out-of-state addresses and the board adopted the fee to recover the cost of investigating experienced applicants.
  • The panel joined the Third and Ninth Circuits in holding that origin-neutral attorney-licensing rules do not facially discriminate under the dormant Commerce Clause.

A federal appeals court on Oct. 9 upheld Florida's practice of charging lawyers who have been admitted to another bar for more than a year far more to apply to the Florida Bar than new applicants pay. The court rejected claims that the higher fee unconstitutionally penalizes out-of-state attorneys.

A three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit affirmed the judgment against two lawyers, one licensed in New Jersey and one in Michigan, who sued on behalf of themselves and other applicants. Judge Luck wrote the published opinion for the panel, which also included Judges Jill Pryor and Brasher.

The ruling leaves Florida's fee schedule in place. Under the state's bar admission rules, applicants who have not been admitted to any bar for more than 12 months pay $700 to $1,000. So-called experienced applicants pay $1,600 to $3,000, and the amount rises with their years of admission. The panel held that the Florida Board of Bar Examiners cannot be sued in federal court and that the rule does not discriminate against out-of-state lawyers. "The experienced-applicant rule draws no line based on where an applicant is from, so it doesn't facially discriminate," Judge Luck wrote.

Steven Hernandez, admitted in New Jersey since 2004, paid the maximum $3,000 fee when he applied in 2020. He postponed the bar exam and sued the board and its executive director, Michele Gavagni. David Drwencke, admitted in Michigan since 2016, wanted to apply in 2021 but balked at a $2,000 fee and joined the suit.

The two lawyers relied on the dormant Commerce Clause, a doctrine the courts have inferred from Congress's power over interstate commerce that bars states from favoring in-state economic interests over out-of-state competitors. They argued that the rule discriminated both on its face and in its practical effect. The U.S. District Court for the Northern District of Florida dismissed the facial claim. It later granted summary judgment to Gavagni on the practical-effect claim.

The panel first held that the board shares Florida's immunity under the Eleventh Amendment, which generally bars federal suits against a state and the agencies that act as its arms. The lawyers argued that the board was not acting as an arm of the state when it proposed the fee. Judge Luck wrote that the board is an administrative agency of the Florida Supreme Court, which appoints its members, approves its budget and sets every fee by order. "At every constitutional and regulatory turn, the board answers to the state," he wrote.

Applicant fees fund the board directly. The court held that the funding source did not defeat immunity because the Florida Supreme Court approves the board's budget and fees and so controls its finances.

That holding left the claim against Gavagni, which failed on the merits. The rule charges the higher fee to anyone admitted in any jurisdiction for more than 12 months and makes no exception for Floridians. The court said that a Floridian admitted for two years in Wyoming would pay the higher fee, while a new applicant from Rhode Island would not.

The panel aligned itself with the Third and Ninth Circuits, which rejected facial challenges to Pennsylvania and Arizona rules limiting admission on motion to lawyers licensed in reciprocal states. The lawyers argued that those rules merely classified applicants, while Florida's rule "taxes" them. Judge Luck called that "a distinction without a difference," adding that "any state-created barrier to interstate commerce surmountable by payment is a surcharge or 'tax.'" He concluded: "Floridian or out-of-stater, every experienced applicant pays the higher fee."

On appeal, the lawyers recast the fee as a surcharge on an article of commerce, namely the out-of-state law license itself. The court questioned whether the theory had been preserved but rejected it anyway. "That an experienced applicant pays more for that authorization is a consequence of his experience, not the origin of his existing license," Judge Luck wrote. He added that a law license is "never anything more than a state's authorization to enter that state's legal market." "An out-of-state law license doesn't allow a lawyer to compete in Florida, and vice versa," he wrote.

The practical-effect claim failed on the record. Since 2008, more than 7,600 experienced applicants have sought admission, and 55 percent had out-of-state addresses. The panel held that because "out-of-staters and Floridians make up nearly equal proportions of experienced applicants, the experienced-applicant rule doesn't even 'disproportionately' impact out-of-state applicants."

The lawyers pointed out that only 13 percent of new applicants live outside Florida and argued that the rule "burdens more than four times as many non-Florida residents as it benefits." The panel held that a law is not discriminatory merely because it will apply most often to out-of-state entities.

The court also found that the record showed no protectionist motive. According to the board's evidence, the fee offsets the extra cost of investigating experienced applicants, including their applications in other jurisdictions, prior discipline, malpractice claims and court sanctions. "There's just more to investigate for experienced applicants than there is for new ones," Judge Luck wrote.

The lawyers called that rationale a pretext. They said that the fee brings in far more than the investigations cost and that the board uses the surplus to discount fees for law students and new lawyers, most of them Floridians. The panel held that the discount goes to every new applicant, resident or not, and that the rule does not shield Florida lawyers from competition. "After all, the experienced applicants pay the fee so that they can enter the Florida market for legal services," the opinion said.

The panel affirmed the district court's judgment for the board and Gavagni and denied all pending motions as moot. The trial court had entered that final judgment after the lawyers amended their complaint to disavow any claims not yet decided.